Social Security Benefits: 2025 Prediction

May 15, 2019

If Congress doesn’t act soon, tens of millions of Americans will only receive about three-quarters of their Social Security benefits when they retire.

Social Security’s trust funds will be tapped out by 2035, according to an annual report released Monday by trustees of the government’s two largest entitlement programs, the other being Medicare. That’s one year later than last year’s report projected.

The new projection doesn’t mean retirees will no longer get checks in 16 years. But the program will at that point only have enough revenue coming in to pay three-quarters of promised benefits through the end of 2093.

The trustees urged lawmakers to act quickly to assure Americans they’ll be able to get their full retirement benefits.

During the 2016 campaign, President Donald Trump said he wouldn’t touch Social Security. He didn’t believe he’d need to since his plan to boost economic growth to at least 4% would take care of Social Security’s long-term solvency.

For the first time since 1982, Social Security’s total cost is expected to exceed its total income in 2020 and continue that way through 2093. This is two years later than projected in last year’s report.

The program would be financed with a combination of interest income and drawing down on the trust funds’ assets until 2035 when the reserves are depleted. Social Security’s costs are expected to rise for the next 20 years as the large Baby Boom generation retires and then remain fairly constant.

At the end of 2018, the Social Security program provided benefits to about 63 million people, mainly retired workers, but also their dependents and their survivors, as well as disabled workers and their dependents.

The share of Americans 65 or older is projected to grow by more than a third between now and 2040, according to the left-leaning Center on Budget and Policy Priorities. This alone will boost Social Security spending from nearly 5% of the economy to about 6% in 20 years, where it is expected to remain.

This demographic shift, along with rising health care costs, will cause Medicare spending to jump from 3.7% to 6.5% of the economy over the same period.

One bright spot in the report: The trustees dramatically revised their estimates for the lifespan of the Disability Insurance Trust Fund. It now won’t be depleted until 2052, two decades later than projected last year. The number of people on federal disability and new applications have been on the decline in recent years.

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